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Dodd-Frank at Two

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On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act. Two years later, regulators are still hard at work putting the mammoth law into effect. Although they have written thousands of pages of rules, they are far from finished, as contributing editor Randy Myers reports in our cover story, “Unfinished Business.”

There have been numerous accomplishments (however controversial), including the establishment of the Financial Stability Oversight Council, the Consumer Financial Protection Bureau, “say on pay” shareholder voting, and hedge-fund registration and reporting. But some of the thorniest provisions of the law remain on the drawing board, such as the Volcker Rule, which would limit banks’ proprietary trading. One seasoned observer told Myers that implementing Dodd-Frank wouldn’t be finished until “at least well into 2013.”

Even partial progress on Dodd-Frank is too much for those who continue to insist that the law is unnecessary or worse and should be repealed, either in whole or in part. One prominent critic of the Volcker Rule has been Jamie Dimon, the superstar CEO of JPMorgan Chase. It was more than a little embarrassing for Dimon, therefore, when JPMorgan revealed in May that its chief investment office had lost at least $2 billion on an ill-advised trade (“The Hedge That Wasn’t”).

There have been many criticisms of Dodd-Frank — it goes too far, it doesn’t go far enough, it’s too complex, it’s a brake on the economy, and so on. But as Myers reminds us, it’s hard to fault the motivation behind this sweeping overhaul of the nation’s financial system. After all, it wasn’t long ago that the government was forced to pump trillions of dollars into the system to keep it from failing, while millions of people lost their jobs, their savings, and their homes.

Elsewhere in this issue we offer the latest installment of one of our most popular features, the annual working capital scorecard, done in cooperation with REL Consulting (“Too Much of a Good Thing”). See how your company stacks up against some of the best (and worst) performers in working capital management in Corporate America.